October 28, 2014 / 9:24 PM / 5 years ago

UPDATE 2-Gilead third-quarter Sovaldi sales dip, but net profit triples

(Adds company comment, updates share price)

By Deena Beasley

Oct 28 (Reuters) - Gilead Sciences Inc, maker of $84,000 hepatitis C drug Sovaldi, on Tuesday said third quarter net profit more than tripled and product sales doubled, despite a dip in Sovaldi sales as doctors and patients awaited a recently approved combination pill.

The company, which received U.S. regulatory approval earlier this month for new hepatitis C drug Harvoni, said total product sales for the quarter more than doubled to $5.97 billion from $2.71 billion a year earlier.

Third-quarter Sovaldi sales totaled $2.8 billion, which fell short of the average Wall Street estimate of $2.97 billion, according to Deutsche Bank. Second quarter-sales of the drug, which was launched last December and has drawn criticism from insurers over its cost, totaled $3.48 billion.

Shares of Gilead, which closed at $113.45 on Nasdaq, fell 4 percent to $109 in after-hours trading. So far this year, the shares have gained around 48 percent.

“There’s a lot of warehousing going on for the launch of the new all-oral Harvoni,” said RBC Capital Markets analyst Michael Yee. “But we expect a significant increase in hepatitis C sales in 2015 as the all-oral was just launched a couple of weeks ago.”

A 12-week course of Harvoni is priced at $94,500, but Gilead has said many patients will be cured of the virus after just eight weeks of treatment.

“We’re seeing a broader group of physicians writing (Harvoni) scripts than with Sovaldi,” Gilead Chief Operating Officer John Milligan said during a conference call. “With regard to payers, we’re feeling reasonably confident with their reaction.”

Yee forecasts $15 billion in worldwide hepatitis C sales for Gilead next year.

Gilead, also the world’s largest producer of branded HIV drugs, reported a quarterly net profit of $2.73 billion, or $1.67 per share, compared with $788.6 million, or 47 cents per share, a year ago.

Excluding one-time items, Gilead said it earned $1.84 per share.

The company raised the lower end of its 2014 product sales outlook to $22 billion from $21 billion, but left the upper end unchanged at $23 billion. Wall Street analysts, on average, have forecast 2014 sales of $24.3 billion, according to Deutsche Bank.

Gilead also increased its estimate for 2014 sales, general and administrative costs to between $2.7 billion and $2.8 billion from a previous estimate of $2.3 billion to $2.4 billion, citing a change in accounting for a U.S. tax.

Additional reporting by Bill Berkrot; Editing by Bernard Orr

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